1. Field
The present disclosure relates generally to data processing and financial decision systems, and more particularly, to a system and method for issuing and managing a plurality of credit card accounts.
2. Description of the Related Art
Credit cards are a huge business and a large part of the world economy. Credit cards can be basically broken down into three categories: national/universal cards such as MasterCard™ and Visa™; travel and entertainment cards such as American Express™ and Diners Club™; and local merchant/house cards that each store separately issues for their stores (such as Office Depot™, Sears™, Macy's™) or the brands in their store chain, for example, the Gap™ card is valid for all their branded stores including Old Navy™, Gap™, and Banana Republic™. Despite credit risk and credit card fraud which are large factors in the industry, stores are very motivated to issue their own credit cards because of the high profit associated with an individual merchant/house credit card. In many cases, for example, a credit card issuer will charge upwards of 16% interest on unpaid balances, while the merchants cost of extending credit is far below this number.
In fact stores and store employees are extremely motivated to sign up customers to their own brands of credit cards, and acquisition costs of getting a credit card customer can run hundreds of dollars.
Customers for individual stores are frequently incentived by the merchants to sign up for credit cards with special promotions and prizes. Frequently, customers will receive a one-time discount on their purchases if they will sign up for the account. Millions of customers do sign up each year in the United States to receive individual merchant credit cards.
One of the main reasons customers do not sign up for individual store accounts, e.g., a merchant/house accounts, is that they do not wish to carry an individual credit card for each and every store. It is far easier to just keep one or two national credit cards that can be used at hundreds of merchants, then many cards that must be carried. In some cases, if a customer does not have his store card, a store will allow the customer to show a driver's license or other identification and they will look up the customers account number; but in many cases this takes a great deal of time during check-out, if it can be done at all.
Another reason that customers will not sign up for individual store accounts is that the sign up and approval process takes time. While the sign up and approval for most merchants is very automated, it is still a cumbersome and time consuming process that many people are not prepared to go through particularly when the merchant is trying to get them to sign up on the spur of the moment during the check-out process.
Therefore, a need exists for techniques to facilitate signing up customers for proprietary merchant/house credit cards and allowing the customers to use the cards without carrying them, while still maintaining maximum credit security for the merchant and customer.